Florida Bar recognizes specialists may be required for contingency fee rule as it relates to medical liens
The Florida Bar is currently studying the attorney contingency fee rule to address the hiring of special attorneys to resolve subrogation and medical lien issues related to personal injury cases. The issue has been presented to the Board of Governors and passage will effect MSP compliance in Florida.
A special committee reported to the board at its May 28, 2010 meeting on the suggested amendments to Rule 4-1.5 and the proposal will come back to the board for a vote at its July 23 meeting.
The issue before the committee addresses the question whether referring medical liens to a second attorney, who would be paid on a reverse contingency fee, would violate the contingency fee cap in the rule itself. The Board Review Committee on Professional Ethics opined that if the total fees paid to both attorneys exceeded the limits in the rule, a problem is evident.
However, they recognized that medical lien resolution has become an increasingly intricate area in tort cases. Bringing in an expert could save the client money, even if the contingency fee limits are exceeded. Clearly, the ramifications of the new rule may have far reaching effects on Medicare Secondary Payer issues including lien research, negotiation and resolution. Jay Cohen, appointed by the Board Review Committee on Professional Ethics to examine the issue, told the board the panel was recommending adding a new subsection to the rule, as 4-1.5(f)(4)(E).
The new proposed subsection (E) reads:
“The lawyers shall include in the contract an explanation of the scope of any subrogation or lien resolution services the lawyer will undertake at the conclusion of the primary matter. The lawyer shall not charge additional fees for handling lien resolution services if those additional fees, when combined with the lawyer’s fees for handling the primary claim, would exceed the contingent fee schedule set forth in this subdivision.”
If extraordinary subrogation or lien resolution services are handled by others outside the primary lawyer’s firm who will charge additional attorney’s fees or costs to the client, these services shall only be provided after obtaining the client’s informed written consent to the additional fees or costs. Any additional fees or costs charged by the other lawyers involved in the subrogation or lien resolution services must separately comply with the provision of Rules 4-1.5(a) through 4-1.5(e), and if the fees are contingent on the outcome of the lien resolution, the lien or subrogation resolution fees on their own must also comply with Rule 4-1.5(f).”
Gary Blankenship, Senior Editor of The Florida Bar News reported that the proposed comment for the new rule clarifies several related issues, including:
Lawyers taking the personal injury or wrongful death case must set out in the contract whether subrogation and lien resolution issues will be handled as part of the contingency contract.
As part of any contingency contract, the attorney has the obligation “to make reasonable efforts to ascertain the existence of any medical liens and subrogation claims, advise the client of their existence, make reasonable efforts to negotiate liens that are negotiable, and disburse the amounts to lien-holders and subrogation claimants” as agreed by the client and third parties.
The original attorney must determine if the additional services needed constitute the practice of law, and if they do, must not refer the matter “to a non-lawyer or someone not authorized to provide the services.
Lawyers may also provide other ancillary services, such as estate planning, bankruptcy, financial planning, public benefit planning, and similar work which are not part of the contingency contract. According to the proposed comment, “The personal injury lawyers should clearly indicate in the lawyer’s contract that the lawyer does not intend to undertake such ancillary services, if the lawyer does not intend to do so.”
For purposes of MSP Compliance, the new rule seems to require attorneys to set out, in writing, whether they will handle Medicare Lien issues as part of their contract with the client and, more importantly, requires attorneys to investigate the existence of liens including Medicare’s conditional payments.
Florida, then, is moving solidly in the direction of placing the onus on the attorney for the plaintiff in tort cases to protect Medicare’s interests directly, unless the client is advised regarding a referral to another attorney or provider. With adoption of the rule, plaintiff’s attorneys would truly seem to be unable to stick their heads in the sand regarding MSP compliance in tort cases.
Unwillingness or uncertainty with respect to Medicare’s lien interests will now be codified in the attorney’s fee statute itself, requiring the plaintiff to acknowledge lien rights and to make some arrangements to address and resolve them. Truly, the Florida Bar’s express concerns regarding lien practice places MSP Compliance squarely at issue. The July 23 vote will indicate whether the bar is willing to take the lead on what is sure to be a critical issue in Florida tort law.